The time to reduce debt was in early 2003 when a bunch of neocon fools had just taken power in all branches of government. They looked at some curves of deficits that, if extrapolated, seem to indicate that we within a decade would have payed the whole national debt off and started to save up for a rainy day. For some reason they considered that prospect so bad that they immediately had to make a bunch of reckless taxcuts for the wealthy (because as their supreme leader said “deficits doesn’t matter, and we (the rich) have earned it”). At the same time a neocon moron was in charge of the Fed and he decided that this was also a great time to have private and corporate debt explode. Those people did the exact opposite of what would be prudent to do after the economy had recovered from a shallow ressecion (which is to pay down debt, so you are ready for some deficit spending when the next ressesion comes at you).

O.K., so debt doesn’t matter, and debt service payments don’t matter.

The more debt, the better.

We don’t need to produce anything; we can just keep borrowing.

DL, the debt to GDP ratio has nothing to do with how much debt it takes to “generate” GDP. The old debt that Reagan gave us in the 80′ies is not generating any of todays GDP (if anything it is restricting todays GDP), but it is still part of our government debt. The debt that can generate GDP is the new (increase in) debt. That is why the loss of debt in the private and corporate sector is bad news for the GDP, and why the government has to try to pump loans and money into corporations and households to put a brake on the reduction in debt. We do not want to slide into a deflationary depression.

http://www.mainstreetmonroe.com/voice/topic.asp?topic_id=12743

http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&CFID=46900191&CFTOKEN=72778978&category=SpecialReport&newsletterid=1432&menugroup=Home

Following are excerpts:

“…it took $1.50 of debt to generate $1 of GDP for the two decades of the 1960s and 1970s, and then it averaged $2.50 to generate $1 of GDP in the period from 1982 to 1997. Starting in 1997 the debt really took off and this economy wound up taking a little more than $3.50 to generate just $1 of GDP in 2008… … The composition of the debt is $25 trillion in Corporate debt-both financial and non financial, $14 trillion in Household debt, and $13 trillion of Government debt-Federal and State & Local) and the GDP is $14.4 trillion”.

First, I hope that you really are a woman and not some dude with a female online handle…because that would be most disappointing.

I missed that article, but heard about his proclamations all day long. It confirms my view about Pimco. On a much larger scale they remind me of ol’ T.Boone talking his book every few weeks on the oil markets. It’s incredible that media outlets allow these folks to talk their positions in such ways. Astounding.

In re: the Treasuries….I have to agree with the guy. The 10 yr Note achieved all of my wildest objectives to the upside and now looks mighty wobbly. I would not be long any long dated treasuries of ANY kind at this point. It would be very nice to see the 10 yr note take another leg down tomorrow or Monday and set a new recent low, because then it would then look VERY MUCH like a five wave structure lower from the all time highs….which would be HUGELY BEARISH.

Regards,

AT.

Was hoping the news would get better when I returned to reality earlier this evening but it’s still not looking so good. Neither one of us may get that case of wine for quiet a while, as we appear to be pretty range-bound these days.

How does a place like Merrill Lynch not make a mint with a guy like this on their team?? And by making a mint, I am not meaning in retail–I understand he’s highly respected on the retail side… Is he just considered a sideshow elsewhere?

BR-you’ve highlighted his research numerous times over the years—what is up with the street and this guy? Or some of the other great thinkers that don’t have optimistic views? What is it on Wall Street? Is it the opposite of the evening news where only bad news sells? Are only perpetual optimists loved?

I read this report and want some Maalox…